Natural gas

19 August 2026, 11:21 UTC Chief Investment Office GWM Investment Research

Strong supply growth keeps market well supplied CIO View: Natural gas Giovanni Staunovo, Strategist, UBS Switzerland AG

US natural gas (USD/mmbtu) • US natural gas inventories are building much faster than the seasonal Forecasts Spot norm, likely leaving the market with elevated inventories heading into 19 Aug 26 2.80 the next winter season. Dec 26 3.90 • Lower US natural gas exports, together with resilient supply despite 3.20 Mar 27 lower prices, have kept the market well supplied. As a result, we have lowered our forecasts. Jun 27 3.20 Sep 27 3.20 • While our forecasts are above current spot prices, they are broadly in line with market pricing; therefore, we do not currently see active Note: Forecasts refer to end of period. Source: Bloomberg, UBS trading opportunities in the commodity.

US natural gas inventories Values are in trillion cubic feet The injection of natural gas into underground storage facilities continues at a faster pace than the five-year average for this point in the season. In March, US natural gas inventories were broadly in line with the five- year average. However, according to the latest US natural gas storage report, inventories stood at 3.15 trillion cubic feet—around 321 billion cubic feet, or 7.8%, above the five-year average. This suggests that supply growth outpaced demand growth in recent months. US natural gas inventories could reach the high 4 trillion cubic feet range by the end of the injection season in October. As a result, we are lowering our December 2026, March 2027, and June 2027 forecasts by USD 0.20/ mmbtu. Source: EIA, UBS Looking at data from the Energy Information Administration (EIA), US dry gas production has remained stable in the 110-111 billion cubic feet per day (bcfd) range since February, while year-on-year supply growth slowed from 5.8bcfd in February to 2.8bcfd in July. This trend of slower growth is expected to persist over the coming months. That said, one important driver of demand growth, liquefied natural gas (LNG) exports, has been weaker in recent months. LNG gross exports reached a record 18.5bcfd in March before falling to 16.6bcfd in July. Gross LNG exports are expected to reach a new record high only toward the end of the year, keeping the market better supplied in the meantime.

Our outlook for 2027 remains positive relative to the current spot price, but it remains conservative and broadly in line with market pricing. We will continue to monitor the impact of new natural gas pipelines currently under construction in Texas, Louisiana, and Oklahoma. These projects are likely to increase regional capacity to transport natural gas and could support production growth if prices rise.

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures that begin on page 2.

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